Zomato asks Gold partner restaurants to serve 45-day notice before pulling out

A day after more than hundreds of partner restaurants pulled out from offering complimentary meals and drinks, Gurugram-based food delivery major Zomato has in a letter asked its Zomato Gold partner restaurants to serve notice before discontinuing service.

“With a view to make sure we protect the user experience, we would request you to let us know proactively in case you are thinking of going off the programme for a brief period, as we will not like your users to have a poor experience when they visit your restaurant. As per the contract, you are required to give us a 45 days notice for this change to ensure a smooth transition for users," said Zomato in the letter quoted by a Mint report.

The company further said that the decision to stay and continue their services rest with them.

Zomato's subscription-based Gold membership programme has over 1 million subscribers and 6,500 restaurants as its partners. Zomato has been experimenting with various new programs to improve its offerings and maintain a loyal customer base. In July, it launched another similar program Infinity Dining.

Almost 20 months old loyalty program accounts for 10% of the company's revenue. By the end of this year, Zomato expects Gold to help it garner 20-25 million in revenue.

With partner restaurants pulling out abruptly now, it might hit the food delivery app business if not resolved soon.

Earlier on Thursday, more than 300 restaurants in Gurugram in a protest against deep discounting pulled out from aggregators and table reservation services platforms such as Zomato, EazyDiner, Nearbuy, MagicPin and Gourmet Passport.

NRAI’s Gurugram chapter has come together in the #logout movement to give the city freedom from aggregators, who have distorted a vibrant marketplace by aggressive discounting and predatory pricing, said National Restaurant Association of India (NRAI) president Rahul Singh.

Restaurants, part of NRAI in other cities including Delhi, Pune, Bengaluru and Mumbai, will also join the protest and de-list from these platforms.

NRAI represents 500,000 restaurants in India.

Restaurants have complained that their business is suffering due to unjust practices exercised through deep discounting. It has resulted in increasing rentals and denials of the input tax credit, added Singh.

NRAI expect such apps to revisit discounting methodology and recalibrate it, keeping in mind multiple stakeholders in the business.

Though, restaurants will remain listed on delivery and search platforms.

Over the years, aggregators and food delivery apps have launched many discounting schemes to draw customers.

EazyDiner offers regular members of its EazyDiner Prime programme savings of over Rs 50,000 a year at some of the most premium restaurants. Zomato, under its recently launched Infinity Dining programme allows its Zomato Gold members to order unlimited meals at restaurants for a fixed price.

Similarly, other such platforms also have enticing programs for customers offering deep discounts on listed restaurants.